Mediterranean Region On Verge Of Becoming Gas Producing Hub

Mediterranean Region On Verge Of Becoming Gas Producing Hub

The Mediterranean region could soon turn into a major gas producing hub if Royal Dutch Shell Plc’s plan to pool gas from Israel, Cyprus and Egypt succeeds.

Shell is in talks to buy natural gas from Israel’s Leviathan field, combine it with output from Cyprus’s Aphrodite field, in which it owns a 35 percent stake, and pump it to a liquefied natural gas plant in Egypt, according to a news report carried by Bloomberg.

Talks are at an early stage and some of Aphrodite’s gas could be sold locally, the report said quoting some unidentified sources.

Combining output from the fields, which share some major investors, could potentially improve the economics of the projects, say analysts.

Leviathan’s partners, led by Noble Energy Inc. and Delek Drilling LP, are looking at various shipment options as they face an estimated development cost of $3.75 billion. The partners would have to seek further funds to increase the field’s capacity if they do the deal with Shell.

Israeli and Cypriot gas finds, together with the giant Zohr field off Egypt and reservoirs off Lebanon, could create a center of gas production right on Europe’s doorstep. While that has given a handful of nations access to vast resources, they are still trying to figure out the best way to use the fuel in a region fraught with political enmity.

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